The Legal Implications of Reputation Risk Management for Franchisors

Abstract

Franchisors in Britain face a difficult problem. If they use the techniques of reputation risk managementto protect their corporate brands (which is usually their most valuable assets), they may inadvertently increase theirexposure to third party tort claims. This paper explains why this may occur and how the franchisor could try to doto deal with this problem. It shall be suggested that a form of reputation risk management should be adopted byfranchisors, even where the tort risk remains. This is because the franchisor has much to gain from having anefficient method of protecting the corporate brand where appropriate legal and organisational arrangements can bemade to further this goal